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Fed chair: Pandemic has particularly hurt women; board member stepping down

Federal Reserve Chair Jerome Powell expressed concern Monday that the pandemic recession has had an unusually harmful economic effect on women, who have been forced to shoulder additional responsibilities for childcare, forcing many of them to leave work.

“As schools closed and childcare services shuttered during the worst of the pandemic, that added responsibility and stress made working more difficult for some and took many away from their jobs,” Powell said in remarks to a Fed conference on gender and the economy. “These burdens are real and have been an additional challenge during an already challenging time.”

Women, particularly mothers of young children, are still less likely to be working or looking for work than are fathers or women without children. Childcare has become increasingly expensive and difficult to find, with many school after-care programs having yet to fully reopen. During August and September, working mothers lost jobs even though the nation’s overall unemployment rate fell and an average of 400,000 jobs were added each month.

The departure of so many mothers from the workforce is a big reason why the proportion of Americans who are either working or looking for work remains below pre-pandemic levels even while employers are scrambling to fill a near-record total of available jobs.

When the pandemic recession struck in March 2020, women, who were more likely to hold frontline jobs in health care, at grocery stores and in other public-facing industries, suffered greater job losses than men, the reverse of what happens in most recessions, Powell noted. In April 2020, the unemployment rate for women was 16.1%, much higher than 13.6% for men, though the rates are now nearly equal.

And in 2020, Fed data showed that 70% of parents reported that the pandemic disrupted childcare or in-person schooling, and 25% of mothers in a Fed survey said they did not work or worked less as a result, Powell said.

“Long-standing disparities weigh on the productive capacity of our economy, which can only realize its full potential if everyone has a solid chance to contribute to, and to reap the benefits of, broad-reaching prosperity,” Powell said.

Powell’s remarks coincide with new research by Stephanie Aaronson, a former Fed economist who is director of economic studies at the Brookings Institution. Her research concluded that other factors have also likely depressed women’s participation in the workforce. Since women were overrepresented in such hard-hit service industries as restaurants and retail, many of them may be reluctant to return to those in-person jobs until the pandemic is further under control, the study found.

— Christopher Rugaber, AP Economics Writer

Quarles to leave Fed’s board, giving Biden another slot

Randal Quarles announced Monday that he will resign from the Federal Reserve’s Board of Governors at the end of the year after completing a four-year term as its top bank regulator, opening up another vacancy on the Fed’s influential board for President Joe Biden to fill.

Quarles has served as the Fed’s first vice chair of supervision, which gave him wide-ranging authority over the banking system. In that role, he oversaw a broad loosening of some of the financial regulations that were put in place after the 2008-2009 global financial crisis and recession.

Quarles’ deregulatory approach prompted criticism from some on the Fed and from many progressives. It has also sparked resistance from progressives to the potential re-nomination of Jerome Powell as Fed chair.

With Powell’s term as chair ending in February, an announcement is expected sometime this month on whether Biden will offer him a second four-year term. The president is considered likely to re-nominate Powell, although he could decide instead to elevate Lael Brainard, who is now the lone Democrat on the Fed’s seven-member board, to the position of chair.

Besides Quarles’ soon-to-be vacated position on the board, a second slot is vacant and a third will open up in January, when Vice Chair Richard Clarida’s term will expire. Counting the seat held by the Fed chair, that gives Biden a total of four potential slots to fill.

The president may decide to renominate Powell while also promoting Brainard to replace Quarles as vice chair for supervision. That move could potentially mollify at least some of Powell’s critics. Brainard cast some dissenting votes against Quarles’ deregulatory efforts.

Late last month, in an appearance on CNN, Treasury Secretary Janet Yellen defended Powell against any notion that he has weakened bank rules. Yellen asserted that financial regulations were “markedly strengthened” under Ben Bernanke’s Fed leadership, during her own subsequent term as chair and under Powell as well.

Members of the Board of Governors have permanent votes at each Fed meeting on interest-rate policy, a powerful tool that affects hiring and the economy. The 12 regional Fed bank presidents also attend policymaking meetings, though only five of them are able to vote on the Fed’s decisions. The New York Fed president holds a permanent vote, and the regional bank presidents hold four votes that rotate among them each year.

The Fed governors also vote on financial regulations, and they could take steps to regulate some cryptocurrencies, known as stablecoins. Some of the officials, including Brainard and Powell, have discussed incorporating climate change considerations into the Fed’s bank oversight, a possibility that has met with opposition from congressional Republicans.

With four slots open, the Biden administration could nominate several candidates as a package. Potential nominees for the three vacancies on the Fed’s board include Lisa Cook, an economist at Michigan State University who would be the first black woman to serve as a Fed governor, and Sarah Bloom Raskin, who previously served as a Fed governor and as a financial regulator in Maryland.

Another potential nominee is William Spriggs, chief economist at the AFL-CIO and an economics professor at Howard University.

White House principal deputy press secretary Karine Jean-Pierre declined to say how Quarles’ departure could influence who and how Biden would nominate to lead the Fed.

“All I can say is this is incredibly important to the president and he’s taking this seriously,” Jean-Pierre said at Monday’s briefing.

At a Senate hearing in September, Sen. Sherrod Brown, an Ohio Democrat who chairs the Senate Banking Committee, which oversees Fed nominations, said, “It’s time we had a Black woman on the Board of Governors.”

— Christopher Rugaber, AP Economics Writer

Associated Press Writer Josh Boak contributed to this report.